The distinguished voice on the radio advertisement pitching reverse mortgages has a familiar ring: Yes, that’s James Garner, the venerable television and film actor.

Garner, in ads for a lender, touts reverse mortgages as an option for homeowners age 62 or older who are seeking an influx of cash to better manage their ever-mounting expenses – or just live a bit better in retirement.

But the increasing popularity of reverse mortgages has revealed some pitfalls that can be avoided by doing what thousands of U.S. foreclosure victims who entered into bad adjustable-rate loans should have done three and four years ago: Ask questions, do the proper homework, and don’t get swayed by smooth-talking salesmen.

The basics of the reverse mortgage are simple enough to grasp. It allows an eligible homeowner to borrow from the home’s equity in a lump sum, line of credit or regular payments, while not having to pay a monthly mortgage. The homeowner retains title and must pay insurance and property taxes while living there.

The loan and fees are due once the homeowner listed on the deed dies or vacates the home for 12 straight months. The home is usually sold, and the proceeds from the sale are used to pay off the loan – plus interest and those pesky fees.

The typical customer owns the home outright or has a relatively low mortgage balance. Many who take reverse mortgages and the monthly payouts are on fixed incomes from Social Security or pensions and want financial help as they work to meet the rising costs of taxes, medicine, utilities and food.

Others may take part of a lump sum for home improvements, for example. And the homeowner never owes more than the home’s value.

About 90percent of U.S. reverse mortgages are Home Equity Conversion Mortgages. They are insured by the Federal Housing Administration.

Nationally, the reverse-mortgage bandwagon is filling up. In fiscal year 2007, the FHA endorsed 107,558 reverse mortgages, an increase of 40percent over fiscal 2006 and more than 12 times the number recorded in fiscal year 2001, according to the National Reverse Mortgage Lenders Association.

FHA-endorsed reverse mortgages are up 3percent in this current fiscal year, which runs from October to September.

David Certner is legislative police director for AARP. He and others note that reverse mortgages should be something of a last resort, partly because of high fees associated with the loans. Those interested in adding to their monthly budget may want to seek alternatives, such as other types of loans, or even selling the home before settling on a reverse mortgage.

Reverse mortgages also mean the home will probably be sold at the end of the loan, mainly because the homeowner, or an heir if a death is involved, will be looking for cash to pay off the mortgage. Thus, seniors who want to leave their homestead to their children may not want to enter into a reverse mortgage.

In a meeting of the Senate’s Special Committee on Aging in December, Sen. Herb Kohl, D-Wis., warned that marketers often “gloss over” the risks of reverse mortgages. Worse, salesmen persuade seniors to take the cash from a reverse mortgage and use it to fund another investment, such as an annuity, which can tie up retirement savings beyond one’s lifetime, Kohl said.

That practice allows unscrupulous salesmen to double up on their fees. The Financial Industry Regulatory Authority issued an investor alert in March, saying fees and costs associated with reverse mortgages can be up to 4percent to 8percent of the total loan amount.

Even the FBI is taking a look at reverse mortgages. In April, The Associated Press reported that the FBI said it has seen an uptick in reverse-mortgage cases as part of its mortgage-fraud inquiries.